BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA
APPLICANT:
R. L. CLAM PITT & ASSOCIATES, INC.
RELIEF SOUGHT: POOLING
Cause CD No.
201402392
LEGAL
DESCRIPTION:
NE 1/4 SECTION 4, TOWNSHIP 2
NORTH RANGE 2 WEST,
GARVIN COUNTY, OKLAHOMA
APPLICANT:
R. L. CLAMPITI' & ASSOCIATES, INC.
RELIEF SOUGHT: POOLING
Cause CD No.
201402393
LEGAL
DESCRIPTION:
SE 1/4 SECTION 4, TOWNSHIP 2
NORTH RANGE 2 WEST,
GARVIN COUNTY, OKLAHOMA
L
DEC 222014
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csOtFICt' )tV.1
'1PflOH COMMISSION
OFOYLMOM
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These Causes came on for hearing before Niles Stuck, Administrative Law Judge for the
Corporation Commission of the State of Oklahoma, on the 8th day of October, 2014, at 8:30 a.m.
in the Commission's Courtroom, Jim Thorpe Building, Oklahoma City, Oklahoma, pursuant to
notice given as required by law and the rules of the Commission for the purpose of taking
testimony and reporting to the Commission.
CASE SUMMARY
R. L. Clampitt & Associates, Inc. brings CD 201402392 and CD 201402393 seeking authority to
pool the NE 1/4 of Section 4, Township 2 North, Range 2 West and the SE 1/4 of Section 4,
Township 2 North, Range 2 West both in Garvin County, Oklahoma. At issue is whether a Joint
Operating Agreement (JOA) should be described in the pooling order and what effect that JOA
has on that order.
RECOMMENDATION:
The applications should be approved so long as the following language be included in the
pooling orders in both applications:
"The Applicant recognizes there is an allegation that a Joint Operating Agreement burdens the
interests being pooled by this order. The Commission does not have jurisdiction over parties
who have entered into a private agreement. The Commission does not have jurisdiction over
matters arising out of private contracts and takes no position regarding whether the Joint
Operating Agreement burdens the lands pooled by this Order. Should it be determined that the
Applicant and one or more Respondents are parties to a private agreement, and that agreement
burdens the lands pooled by this Order, this order has no effect with regard to those
respondents."
HEARING DATE:
October 8, 2014.
APPEARANCES:
Charles B. Davis, Attorney at Law, appeared on behalf of the
Applicant, R. L. Clampitt & Associates, Inc.
John C. Moricoli, Jr., Attorney at Law, appeared on behalf of
protesting Respondent, Lario Oil and Gas Company.
Richard Books and Eric Huddileston, Attorneys at Law, appeared
on behalf of Respondent, XTO Energy, Inc.
SUMMARY OF EVIDENCE
The following numbered exhibits were admitted into evidence.
1.
2.
3.
4.
An Authorization For Expenditure.
"Takeoff' for each unit describing.
A Title Opinion created by Bill Gwinn.
A series of Oil and Gas Leases covering the E/2 of Section 4, Township 2 North, Range 2
West, Garvin County, Oklahoma.
5. An Operating Agreement and related amendments.
6. A series of conveyances filed against the E/2 of Section 4, Township 2 North, Range 2
West, Garvin County, Oklahoma.
SUMMARY OF TESTIMONY
1.
Rick Gibbon, a Landman appeared for the Applicant. His qualifications were accepted
without objection. He provided testimony in support of a Pooling order containing the
terms as described below. These terms are not in dispute.
a. The applicant intends to drill a well in each of the tracts covered by each of these
Applications that will explore the Sycamore, Woodford, Hunton and Viola.
b. Each well is estimated to cost $796,455.00 to drill as a dry whole and
$1,485,316.25 to drill and complete.
c. The wells will be drilled to a true vertical depth of 8,100 feet.
d. All Respondents have the right to participate and will be allowed to perfect their
right to participate by paying their proportionate share of the estimated
completion within the deadline as provided below.
e. If a Respondent does not wish to participate, they may elect either of the
following options:
L To accept a
$200
per acre bonus and a
1/8
ii. To accept a
$150
per acre bonus and a
3/16
royalty.
royalty.
f. All elections must be made within 20 day of the order. Any payment of
completion costs must be made within 25 days of the order. The Applicant will
tender any bonus payments within 35 days of the order.
g. If any respondent fails to make or perfect an election within the deadline, they
will be defaulted to the election with the highest bonus and lowest royalty.
h. The order will contain a standard subsequent well clause allowing participating
parties to propose an additional well under the same terms and deadlines as the
initial well. If any subsequent well is not drilled within 180 days, the proposal is
deemed withdrawn and all parties are returned to the position they held before
the proposal was made.
L R. L. Clampitt & Associates, Inc. is the designated operator and will commence
the well within 18o days for the date of the order.
2.
The parties stipulate to the following:
a. The Applicant owns an interest in the oil and gas leases in evidence as Exhibit 4.
The Applicant obtained its interest from William L. Jones by an assignment
dated 1/6/2006.
b. The leases owned by Applicant and Respondent are leases 1, 2, and 3 contained in
Exhibit 4. Those leases covered i00% of the minerals in the lands leased.
c. All leases are held by production.
d. R. L. Clampitt & Associates, Inc. is the successor in interest to Vickers Petroleum
Company, Inc.
e. Lario is the successor in interest to Globe Oil and Refining Company.
f. XTO is the successor in interest to Exxon Company and Exxon Company was the
successor in interest to the Carter Oil Company.
g. Questar Exploration & Production Co. is the successor in interest to Vickers
Petroleum Company, Inc.
h. Larriet Petroleum is the successor to Phillips Petroleum Company.
i. The JOA entered into evidence as Exhibit 5 is in full force and effect.
The title opinion was prepared by Bill Gwinn based on public documents and
personal knowledge.
k. The JOA is binding on all parties to these applications and run with the land.
FINDINGS OF FACT
1. The findings of fact are those stipulated by the parties.
FINDINGS OF LAW
NE 1/4 of Section 4, Township 2 North, Range 2 West and the NE 1/4 of Section 4,
Township 2 North, Range 2 West both in Garvin County, Oklahoma.
2. The Respondent has standing to protest this action.
3. The Commission lacks jurisdiction to pool parties who have entered into a private
agreement.
4. The Commission lacks jurisdiction to hear disputes arising from private contracts.
RATIONAL
1. It is unknown whether or not the JOA entered into evidence burdens the interest being
pooled in these two applications and the Commission does not have jurisdiction to
decide that matter.
2. The Applicant must include a special finding of fact recognizing the existence of the
contractual dispute. Should a court of competent jurisdiction or the parties themselves
determine their interests are burdened by a private agreement, any pooling order will be
null and void as to that party and interest.
3. Based on the above analysis, I recommend the applications be approved so long as the
following language be included in both pooling orders:
"The Applicant recognizes there is an allegation that a Joint Operating Agreement
burdens the interests being pooled by this order. The Commission does not have
jurisdiction over parties who have entered into a private agreement. The Commission
does not have jurisdiction over matters arising out of private contracts and takes no
position regarding whether the Joint Operating Agreement burdens the lands pooled by
this Order. Should it be determined that the Applicant and one or more Respondents are
parties to a private agreement, and that agreement burdens the lands pooled by this
Order, this order has no effect with regard to those respondents."
4. RESPECTFULLY submitted this 22nd day of December, 2014
7
Niles Stuck
Administrative Law Judge
NS:sm
Xc: Gregory L. Mahaffey
Karl F. Hirsh
Office of General Counsel
Michael L. Decker, OAP Director
Oil Law Records
Court Clerk - 1
Commission Files
,